NBFC Registration

The term NBFC (Non-Banking Financial Company) refers to a company that engages in financial activities such as secured and unsecured loans, investments, Marketplace lending, financial information services, or any other business objectives as defined by section 45-IA of the RBI Act of 1934 and the Companies Act of 2013. Although an NBFC engages in a variety of finance activities, it does not hold a complete banking licence. A company that wants to start a lending or investment business must first get a Certificate of Registration (COR) from the RBI. The RBI has simplified the NBFC Regulation, making the process of obtaining a licence easier than before.

Personal Loans, Business Loans, Auto Loans, Gold Loans, Assets Financing, Acquisition of Shares, Stocks, Bonds, Hire-Purchase, Insurance, Currency Exchange, Peer to Peer lending, Hedge Funds, and other NBFC services include but are not limited to: Personal Loans, Business Loans, Auto Loans, Gold Loans, Assets Financing, Acquisition of Shares, Stocks, Bonds, Hire-Purchase, Insurance

For efficient administration and seamless operation of NBFCs, RBI has formed two separate divisions. Department of Non-Banking Regulation and Department of Non-Banking Supervision are two departments that regulate and supervise non-banking institutions. CGM is in charge of both of these departments (Chief General Manager Level Executive of the RBI).

Advantages of NBFC Registration in India

Time and money are saved.

In comparison to small banks, forming an NBFC is a simpler process. Opening a bank requires a significant amount of capital, effort, and expense, but an NBFC does not. To obtain NBFC Registration in India, all that is required is the assistance of a good NBFC consultant with prior expertise.

Loan repayment is simple.

NBFCs function in a systematic manner and provide individualised lending products with manageable repayments. Borrowers will find it to be a convenient method because they will be able to repay the loan amount fast and within the specified time frame.

Payment & Settlements System Regulations, 2008

The same addresses all issues, including the application for authorisation to begin a payment system, the issuance of such authorization, payment instructions, payment standards to be maintained in the payment system, timely filing of required papers and financial information, and so on.

Economic Development

For their financial needs, businesses and individuals seek an easy and dependable source of credit. For personal and business-related credit needs, NBFCs provide inexpensive and secure loan facilities to an underserved market. As a result, by providing financial independence to MSMEs, self-employed professionals, and people, NBFCs have contributed to the country’s economic progress.

Documents Required for NBFC Registration

  1. COI (Certificate of Incorporation) / MOA / AOA certified copy;
  2. Certificate of Directors’, Shareholders’ Net Worth;
  3. Company’s Net Worth;
  4. Certificates of Extensive Experience;
  5. Directors’ and shareholders’ credit reports;
  6. KYC information, the company’s PAN, GST number, and address proof;
  7. Details of the company’s bank account [Rs. 2 Cr must have been deposited as NOF];
  8. Related Party Disclosures;
  9. Income Tax Returns;
  10. Audited balance sheet for the last three years or from the date of incorporation;
  11. A banker’s report confirms that there is no lien on the fixed deposit.
  12. The format of the board’s resolution for NBFC registration.
  13. Underwriting model – Detailed 5-year action plan, including a Fair Practice Code and a risk assessment policy.
  14. The structure of a business and the structure of a loan are both important.
  15. Information Technology Policy.

TYPES OF NON-BANKING FINANCIAL COMPANY

Basically The Non-Banking Financial Companies are categorized in terms of the type of liabilities into Deposit and Non-Deposit accepting Non-Banking Financial Company:

Deposit Non-Banking Financial Companies: NBFCs that can accept deposits from the public, such companies are called Deposit NBFCs.

Non-Deposit Non-Banking Financial Companies: NBFCs that cannot accept deposits from the public, such companies are called Non-deposit NBFCs

As per the Assets Size NBFCs are categorised in following Types:

Systemically Important: NBFCs whose asset size is of INR 500 crore or more as per last audited balance sheet are considered as systemically important NBFCs.

Non-Systemically Important: NBFCs whose asset size is below INR 500 crore as per last audited balance sheet are considered as Non Systemically Important NBFCs.

S.No Compliance/Obligation Due-Date(if applicable) Filing Authority
1. Annual Return under E-Form MGT-7 Within sixty days of Annual General Meeting Registrars of Companies (ROC)
2. Filing of AOC-4 NBFC Within thirty days of Annual General Meeting Registrars of Companies (ROC)
3. If there is any change in Directors E-form DIR 12 Within thirty days of the change of Director Registrars of Companies (ROC)
4. MGT 14 within 30 days from the date of passing of resolution Registrars of Companies (ROC)
5. ADT-1 Within fifteen days from the Appointment of Auditor Registrars of Companies (ROC)
6. MBP-1 Within 30 days from the holding of first Board Meeting Registrars of Companies (ROC)
7. INC 22 Within 30 days from change of registered office address Registrars of Companies (ROC)

  1. RETURNS TO BE SUBMITTED BY NBFCS-D
S.No. Name of the Return Periodicity Due on
1 NBS1 (Return for Financial Indicators) Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
2 NBS2 (Return for Prudential Norms) Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
3 NBS3 (Return for Liquid Assets) Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
4 ALM (NBFC-D): NBFCs-D having public deposit of > ₹20 crore Or asset size of > ₹100 crore Half yearly 30th April/ 30th Oct.
5 Branch Information return Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
6 Statutory Auditor Certificate Annually One month from the date of finalization of Balance Sheet (Not later than 31st December)
7 Reporting to Central Repository of Information on Large Credits (CRILC) Quarterly 21st April/ 21st July/ 21st Oct/ 21st Jan
8 Reporting of Special Mention Account status (SMA-2 return) Weekly NA

  1. RETURNS TO BE SUBMITTED BY NBFCS-ND
S.No. Name of the Return Periodicity Due on
1 NBS7 (Return on Prudential Norms) Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
2 NBFCs-ND-SI 500cr (Return for Important Financial Parameters) Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
3 ALM-1 (Statement of short term dynamic liquidity) Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
4 ALM-2 & 3 (Statement of structural liquidity & Statement of Interest Rate Sensitivity) Monthly 10th of every month
5 ALM-(NBFC-ND-SI) (Statement on Assets Liability Mismatch) Annual 15th April
6 Branch Info return Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
7 Reporting to Central Repository of Information on Large Credits (CRILC) Quarterly 21st April/ 21st July/ 21st Oct/ 21st Jan
8 Reporting of Special Mention Account status (SMA-2 return) Weekly NA
9 Statutory Auditor Certificate Annual One month from the date of finalization of Balance Sheet. Not later than 31st December

 

  1. DETAILS OF RETURNS TO BE SUBMITTED BY NBFC-ARC
S.No. Name of the Return Periodicity Due on
1 ARC Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan.
2 Statutory Auditor Certificate Annual One month from the date of finalization of Balance Sheet. Not later than 31st December

  1. DETAILS OF RETURNS TO BE SUBMITTED BY NBFC-ND-HAVING ASSET SIZE OF 100 TO 500 CRORE
S.No. Name of the Return Periodicity Due on
1 NBS-8 (Return for Financial Indicators) Annual 30th May
2 Statutory Auditor Certificate Annual One month from the date of finalization of Balance Sheet. Not later than 31st December

  1. DETAILS OF RETURNS TO BE SUBMITTED BY NBFC-ND-HAVING ASSET SIZE BELOW 100 CRORE
S.No. Name of the Return Periodicity Due on
1 NBS-9 (Return for Financial Indicators) Annual 30th May
2 Statutory Auditor Certificate Annual One month from the date of finalization of Balance Sheet. Not later than 31st December.

  1. OTHER RETURNS BY CONCERNED NBFCS
S.No. Name of the Return Periodicity Due on
1 Return on FDI Half yearly 30th April/ 30th Oct.
2 Overseas Investments Quarterly 15th April/ 15th July/ 15th Oct./ 15th Jan